Oil Rebounds From One-Week Low as U.S. Stockpiles Decline

July 11 (Bloomberg) -- Oil rebounded from the lowest close
in more than a week in New York amid signs of a decline in
stockpiles in the U.S., the world’s biggest crude consumer.

Futures climbed as much as 1.7 percent after slipping 2.4
percent yesterday. U.S. inventories fell 695,000 barrels last
week, the American Petroleum Institute said after yesterday’s
settlement. A Department of Energy report today will probably
show supplies slid 1.38 million barrels, according to the median
estimate in a Bloomberg News survey. China reported passenger-vehicle sales that beat analysts’ forecasts.

“I wouldn’t be surprised to see prices rising, as most of
the demand-side risks should be priced in and more risks on the
supply side materialize,” said Eugen Weinberg, the Frankfurt-based head of commodities research at Commerzbank AG. “We’re
likely to see tightening and lower spare capacities in the
second half.”

Oil for August delivery gained as much as $1.40 to $85.31 a
barrel in electronic trading on the New York Mercantile Exchange
and was at $84.99 at 1:18 p.m. London time. The contract fell
$2.08 yesterday to $83.91, the lowest close since July 2. Prices
are down 14 percent this year.

Brent crude for August settlement climbed as high as $1.26
cents, or 1.3 percent, to $99.23 a barrel on the London-based
ICE Futures Europe exchange. The European benchmark’s premium to
West Texas Intermediate was at $13.80, from $14.06 yesterday.

Bollinger Band

Oil in New York has technical support along the middle
Bollinger Band on the daily chart, around $83.40 a barrel today,
according to data compiled by Bloomberg. Futures rebounded
yesterday after trading near that indicator. Buy orders tend to
be clustered close to chart-support levels.

U.S. gasoline inventories gained 2.5 million barrels last
week, the API figures show. They are projected to rise 500,000
barrels in the government report, according to the survey.
Distillate supplies, a category that includes heating oil and
diesel, dropped 717,000 barrels compared with a forecast
625,000-barrel increase.

The API collects stockpile information on a voluntary basis
from operators of refineries, bulk terminals and pipelines. The
government requires that reports be filed with the Department of
Energy for its weekly survey.

Refineries ran at 91.8 percent of capacity, the highest for
that week since 2006, the API data show. The government report
will probably show utilization rates rose 0.2 percent to 92.2
percent, according to the Bloomberg survey.

China Autos

“If the DOE reports similar numbers, they will likely be
bullish enough to send WTI higher,” Stephen Schork, president
of Schork Group Inc., a consulting firm in Villanova,
Pennsylvania, said in an e-mailed report.

A decrease in the Department of Energy’s tally of crude
inventories would be the fifth such decline in six weeks. The
department plans to release the data at 10:30 a.m. Washington
time.

China’s wholesale deliveries of passenger vehicles rose 16
percent to 1.28 million units last month, the China Association
of Automobile Manufacturers said in a statement today. That
compares with the 1.27 million-unit average estimate of 14
analysts surveyed by Bloomberg.

Crude prices have experienced widening swings over the past
month. The 10-day historical volatility for New York oil futures
is at 65.13 today compared with 16.3 on June 15. It reached
65.89 on July 3, the highest since May 17, 2011.

Prices slumped yesterday after Norway ended its longest-ever energy strike. Europe’s second-biggest oil and natural-gas
exporter warned the industry not to use ultimatums that risk
cutting supply. The government announced a plan to resolve the
dispute, which started June 24, with compulsory arbitration
minutes after a deadline at midnight on July 9 that would have
triggered a lockout.